Friday, July 17, 2009

UAE Property prices on the rise again

Property prices in parts of Abu Dhabi and Dubai are witnessing increases as buyers regain their confidence.

The property brokers produced a list of areas where prices had increased by 12 percent last month, while in Abu Dhabi, properties on Al Reem Island have seen an increase by about 30 percent during past couple of months.

After a lull of eight months, average prices fell by 30 percent in Abu Dhabi and by 40 percent in Dubai, and the buyers have returned. Now, it is the third consecutive month of price increase, according to brokers. However, several analysts still prefer to be cautious and say that the market has just leveled out, and that some more decline in prices are likely.

According to Gregory Antioch, a Senior Sales Negotiator at Smith & Ken, a three bedroom villa at The Springs, an established residential community developed by Emaar, which was sold at a rate of Dh.1mn to Dh.1.5mn in May, is now being sold at Dh.2mn.

Emaar's two other projects, 'The Meadows' and 'The Greens' also saw an increase in price by 7 percent and 5 percent respectively. The end-users are less hesitant now, and are realizing that it is cheaper to buy than rent. The distressed sales have almost gone, Antioch noted.

Buyers have begun to trickle into the market in April, when the first signs of price stabilization emerged. A report by HSBC Bank at the end of May indicate that selling prices in the UAE saw an increase of 5 percent in May, compared to April, apart from April's 4 percent gain on March.

Even Deutsche Bank, last month, reported an average price increase of 6.5 percent in 13 major locations in Dubai, compared to May. According to brokers, the trend has remained steady with villa prices in few areas of Dubai, increasing between 10 percent and 12 percent since May.

Nakheel's Palm Jumeirah, the reclaimed island development, which saw a decline in prices by 40 percent during September to November last year, saw an increase in prices by 20 percent, since its "low point" in March.

A Broker at Edwards and Towers, Richard Pemberton, said that most sales were now being driven by end-users who purchase properties to live in them, rather than speculators.

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